Experts believe the Patent Trial and Appeal Board (PTAB) is in need of patent reform. Big Tech companies have used the US Patent and Trademark Office’s (USPTO) and the PTAB the most, filing hundreds of petitions challenging the patents of smaller innovators since the PTAB was established in 2011. Big Tech infringers like the PTAB because it provides them with an additional tool to drag out infringement disputes and increase the cost of enforcing patents for smaller innovators. Congress established the PTAB with the Intent to offer companies that want to challenge the validity of patents, typically patents owned by a rival company, a more efficient alternative to the court system. This is why experts believe the PTAB is in need of patent reform.
The tech giants often prefer to use technology developed by smaller, more cutting-edge companies, without bothering to seek a license. For those smaller companies, which have had their patents infringed upon by Big Tech firms, respond with a lawsuit if they can. Big Tech companies have realized if they find themselves in a lawsuit, they could try to get the disputed patent invalidated at the PTAB with great odds of success. Because Big Tech has deep pockets and a multitude of lawyers, Big Tech has made it a habit of challenging smaller companies’ patents in federal courts and the PTAB often spending them into the ground, and often with repeat challenges at the PTAB. For example, Apple has filed hundreds of petitions with the PTAB, 56% of which are duplicative, and out of the PTAB petitions filed by the top 10 petitioners during 2021, Samsung, Apple, Google, Intel and Microsoft collectively accounted for 81% of all such petitions.
To prevent this abuse, experts recommend legislative action such as ending the practice of allowing serial attacks on the same patent even after the PTAB or a court has ruled it valid. They also suggest that Congress should also require the PTAB meet the same court standard of “clear and convincing evidence,” rather than the status quo “preponderance of evidence,” when invalidating patents. Finally, they recommend a requirement that companies have “standing,” a legitimate financial or business reason, to bring a case before the PTAB which would prevent Big Tech from benefiting from proxy shell companies that simply attack inconvenient patents. Here is an opinion piece we found of interest relating to the need of patent reform to prevent Big Tech from using the PTAB to abuse the patent system.
Big Tech Is Abusing the U.S. Patent System. Time for Congress To Step In
In an opinion piece “Big Tech Is Abusing the U.S. Patent System. Time for Congress To Step In” for Newsweek, Steve Forbes, editor-in-chief, argues that, while patents have been one of the most important factors driving innovation and economic strength throughout America’s history, patents are being undermined by a little-known government body, the quasi-judicial Patent Trial and Appeal Board (PTAB), within the US Patent Office. The PTAB, which was created by Congress as part of the 2011 America Invents Act, consists of a panel of unelected “judges” who hear cases challenging the validity of patents in dispute.
The PTAB was intended to provide a low-cost alternative to district court litigation for resolving patent cases, but instead it has become a tool for large companies, including many Big Tech giants, to attack the patents of smaller innovators, so they can use their inventions without paying licensing fees. Since the PTAB’s inception, these big companies have filed thousands of petitions challenging the patents of upstart rivals. Forbes cites one analysis that revealed that84 percent of patents challenged at the PTAB were partially or wholly invalidated, compared with 30 percent of patents challenged in federal court. Rather than using the PTAB strictly as an alternative to expensive court litigation, which was intended by Congress, big companies seek to invalidate the same patents in the “patent court” and the federal courts forcing inventors to defend their IP on multiple fronts. Read the full article on Newsweek.
Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.
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